Hong Kong-based mobile operator China Unicom has informed the Hong Kong stock exchange that it sold about US$1.8bn in convertible bonds to expand its 3G network.
The notes carry a 0.75% annual coupon and can be exchanged for shares, for up to five years,…
Hong Kong-based mobile operator China Unicom has informed the Hong Kong stock exchange that it sold about US$1.8bn in convertible bonds to expand its 3G network.
The notes carry a 0.75% annual coupon and can be exchanged for shares, for up to five years, when China Unicom stock rises to HK$15.85, or 35.5% more than yesterday’s closing price, according to the filing.
Assuming full conversion at the initial price of HK$15.85 a share, the bonds will be convertible into approximately 900 million shares, representing about 3.8% of the issued shares before the transaction, the filing read.
China International Capital Corporation (CICC), Goldman Sachs and Nomura were the joint lead managers for the offering.
The company explained in the filing that it plans to use the proceeds of the bond issue for the development of its 3G network and other corporate purposes.
A few days ago, China Unicom was reported to be planning to spend Yn70bn (US$10.4bn) to expand its 3G network in China in 2011. The company spent Yn110bn (US$16.3bn) in 2009 launching its 3G network across China.
Last month, the company reported a 62% fall in its first half profits citing the costs of deploying its 3G network and subsidising handsets.
